Foundation reduces ICR and hikes max loan sizes

  • 23/01/2020
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Foundation reduces ICR and hikes max loan sizes
Foundation Home Loans has lowered the interest coverage ratio (ICR) for basic rate taxpayers from 145 per cent to 125 per cent as part of a revamp of its buy-to-let lending criteria.


Affordability will still be calculated at pay rate for its five-year fixed rate deals at the ICR level of 125 per cent.

For all other rates the calculation will be at an ICR of 125 per cent and an interest rate of 5.5 per cent.

There is no change in its existing ICR of 125 per cent for limited company borrowers.

Foundation has also increased the maximum loan sizes across its product range for both 65 and 75 per cent loan-to-value (LTV) deals.

As a result, deals in the F1 and F2 ranges at 65 per cent LTV will be available up to £2m, while other products at that LTV will be available up to £1.5m.

All 75 per cent LTV deals will now have a maximum loan of £1m.

Jeff Knight (pictured), director of marketing at Foundation, said the lender wanted to ensure intermediaries and their clients had as wide a range of deals on offer as possible, adding that the changes kept the rental income requirement down and opened up properties to borrowers that they may not normally be able to consider.

He continued: “Foundation’s focus is on marrying flexibility and accessibility with responsible lending and, given our increased appetite for buy-to-let business this year, we believe these measures help advisers and their landlord clients to get where they want to be.”


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